16 December 2024
Videndum plc
Pre-Close Trading Update
Videndum plc ("the Company" or "the Group"),
the international provider of premium branded hardware products and
software solutions to the content creation market, issues the
following pre-close trading update for the year ending 31 December
2024.
Market update
The recovery in our markets continues to be
slower than expected, but we are seeing some signs of gradual
improvement, which we believe will benefit trading in H1
FY25.
Operational
Actions
We are prioritising actions within our control,
focusing on our operational efficiency programme to drive
performance and cost saving. This programme is centred on four key
areas:
1. reinstating pricing
discipline;
2. improving operational
efficiency;
3. driving gross margin expansion;
and
4. reducing discretionary
spend
As part of this initiative, we are simplifying
our organisational structure, moving from three Divisions to two:
Videndum Production and Imaging ("VPI") focusing on our broadcast
and imaging segments, and Videndum Creative Solutions ("VCS")
serving the cine and audio markets.
Earlier this year we announced a £10 million
strategic cost-saving programme. So far, we are 80% through
implementation and expect to realise the full amount of savings in
FY25. There will be minimal savings realised in FY24. The Group
continues to evaluate further cost saving opportunities.
Expected Outturn for FY24
Revenue is expected to be c.£280
million;
An exceptional charge of c.£25 million is
anticipated against Adjusted Continuing Operating Profit. Before
this non-cash write-off of predominately stock and intangibles,
together with reclassification of previously discontinued
operations, the Group is expected to break-even;
Adjusting items will include a charge of c.£10
million for cash restructuring costs related to announced
initiatives, of which c.£3 million will be paid in FY24 and the
balance in FY25; and
Net debt is expected to be c.£135 million
including c.£30 million of lease liabilities.
Update on December covenant
Our lending banks remain supportive of the
business and have amended our December 2024 covenants to an
interest cover of no less than 1.25 times EBITA and leverage to no
more than 5.5 times EBITDA. The end of March 2025 covenant
thresholds will also now apply to the end of February
2025.
Our Revolving Credit Facility is set to expire
in August 2026. We are actively working with our lending banks to
secure an extension or a refinancing during H1 2025, in addition to
addressing necessary amendments to the February and March 2025
covenants. An update will be provided in Q1 2025.
Stephen Harris, Executive Chairman
commented:
"Since assuming my expanded role, I
have seen significant opportunities within the business. However,
it has to be recognised that there are areas where management
processes, cost discipline, and contractual and commercial acumen
require strengthening. These challenges were exacerbated in some
areas by challenging market conditions. The new management team has
identified the issues and is addressing them at pace.
"We fully anticipate market conditions to
improve, and we are seeing some signs of gradual improvement which
we believe will benefit trading in H1 FY25. In the meantime, we are
focusing on what we can control - expanding our operational
efficiency programme and adopting a relentless focus on
cost.
"Videndum has strong market
positions and remains well positioned in attractive markets with
good medium-term prospects. This management team is committed to
creating long-term value for our stakeholders."
Enquiries
FTI Consulting
Susanne Yule/ Richard Mountain
Telephone: 020 3272 1340
Videndum
Stephen Harris
Group Executive Chairman
Telephone: 020 8332 4602
A
snapshot of Videndum plc
Videndum is a leading global provider of
premium branded hardware products and software solutions to the
growing content creation market.
Videndum's customers include broadcasters, film
studios, production and rental companies, photographers,
independent content creators, gamers, professional musicians and
enterprises. Our product portfolio includes camera supports, video
transmission systems and monitors, live streaming solutions,
smartphone accessories, robotic camera systems, prompters, LED
lighting, mobile power, carrying solutions, backgrounds, motion
control, audio capture, and noise reduction equipment.
We employ around 1,600 people across the world
in 10 different countries. Videndum plc is listed on the London
Stock Exchange, ticker: VID.
More information can be found at: https://videndum.com/
LEI number: 2138007H5DQ4X8YOCF14
This
announcement contains inside information. The person responsible
for arranging the release of this announcement on behalf of
Videndum plc is Jon Bolton, Group Company Secretary.